CCOI Could Be Primary Connector for a Netflix CDN, Says Wells

By Tiernan Ray

Wells Fargo‘s Jennifer Fritzsche this afternoon opines that Internet access provider Cogent Communications (CCOI) could get a boost from Monday’s Christmas Eve Debacle, when Netflix’s (NFLX) streaming video service went down for hours because of a glitch on the part of Amazon.com‘s (AMZN) “Amazon Web Services.”

That black-out has caused Amazon cloud computing customers to ponder other options, according to a report today by Greg Bensinger of The Wall Street Journal. Forrester Research advised clients not to rely on any one hosting or services provider, according to another story today by The Journal’s Joel Schectman.

Fritzsche opines that the Amazon failure “may increase the timing of Netflix’s approach to build out its own Content Delivery Network (CDN),” which Netflix has already said it might do.

Cogent might end up being the primary source of Internet connectivity for a private Netflix CDN, she thinks:

Recall, Netflix is a current customer of CCOI and Level3 (LVLT). However, once Netflix has its own CDN up and running we expect CCOI to be the primary (not only) provider of internet connectivity. If recent events create more of a sense of urgency by Netflix to make this move we believe this could have positive implications for CCOI’s nearterm revenue outlook.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.